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Savings-Bonds-Alert: More Series HH Conversion Quesions

Friday, July 16, 2004

More Series HH Conversion Quesions

I have 23 $100 Series E/EE Savings Bonds that are 30 years old. I am 84 years old, but I need to change them into HH bonds due to the fact that I am still employed and cannot afford to be taxed any more than I am as I do not have any deductions. If I change them into HH bonds, what is the earliest I can cash them without being penalized? Can I change the name on the existing bonds to my daughter and some to my son? Tom's response If you convert to HH, you can redeem the HH bonds after six months. If any of the Series E/EE bonds are more than 12 months past their final maturity, they can't be converted to HH and the registration can't be changed. All you can do is redeem them. If your bonds don't have a living co-owner or beneficiary, when you convert them Series HH you can add your son or daughter to the registration as either a co-owner or a beneficiary without any tax implications. You can't make them the owners, however, without creating a taxable event. The Savings-Bonds-Alert web site has complete information on changing the registration on Savings Bonds. Although I know it hurts to think of it, unless your tax rate is going to go down in the next few years, it might make more sense to cash the bonds, pay the tax, and reinvest in new Series EE or I Savings Bonds. You'll only get 1.5% on the HH bonds. Our analysis of this issue is called Why 1.5% Series HH Savings Bonds are a bad choice for almost everyone. Click here to visit the premier independent web site for Government Saving Bonds.


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